November 2009 Tax Board Bulletin
IRS Removes Debt Indicator for 2011 Tax Filing Season
IR-2010-89, Aug. 5, 2010
WASHINGTON — The Internal Revenue Service today announced that starting with next year’s tax filing season it will no longer provide tax preparers and associated financial institutions with the "debt indicator," which is used to facilitate refund anticipation loans (RALs).
"As we prepare for tax season every year, we look at past practices and consider whether they still make sense. We no longer see a need for the debt indicator in a world where we can process a tax return and deliver a refund in 10 days," IRS Commissioner Doug Shulman said. "We encourage taxpayers to use e-file with direct deposit so they can get their refunds in just a few days."
So far this year, more than 95 million tax returns have been e-filed, representing more than 70 percent of tax returns.
"Refund Anticipation Loans are often targeted at lower-income taxpayers," Shulman said. "With e-file and direct deposit, these taxpayers now have other ways to quickly access their cash."
The IRS has been reviewing refund settlement products, such as RALs and Refund Anticipation Checks (RACs), as part of the Return Preparer Review released in January. Specifically, the IRS announced that it would study refund settlement products.
In a related effort, the IRS plans to explore the possibility of providing a new tool for the 2012 tax filing season to give taxpayers a mechanism to use an appropriate portion of their tax refund to pay for the services of a professional tax return preparer. The IRS plans to engage with taxpayers, consumer advocates and the tax return preparer community to consider whether providing this option would be a cost-effective way for consumers to pay for tax return preparation services.
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IRS Releases Guidance on the HIRE Act Regarding “Qualified Workers” with Self-employment Income
Submitted by Brian Wozniak IRS SB/SE CLD
(07/23/10) QE19: Does work performed as a self-employed individual count in determining whether an individual has been employed for 40 hours or less during the 60-day period ending on the date the individual begins employment for purposes of qualified employee status?
A-QE19: No. Only work performed as an employee counts in determining whether an individual has been employed for 40 hours or less during the 60-day period.
CLICK HERE to read more "Frequently Asked Questions" (FAQ) on this topic.
IRS Releases Proposed Regulations Related to Fees for Preparer Tax Identification Numbers
IR-2010-86, July 22, 2010
WASHINGTON — The Internal Revenue Service today released proposed regulations that would establish a fee for individuals who apply for a preparer tax identification number (PTIN). Proposed regulations that were issued in March would require certain tax return preparers to obtain a PTIN. The IRS is working to finalize those proposed regulations, which are the first of a series of steps planned to increase oversight of federal tax return preparation.
The proposed regulations (REG-139343-08) would establish a fee of $50, payable to the IRS, to cover technology costs, as well as compliance and outreach efforts associated with the new PTIN program. The proposed regulations would also provide for an additional fee (expected to be substantially lower than $50) to be charged by the third-party vendor chosen to operate the new online system. That fee amount is expected to be announced soon, as well as additional details about the launch of a new online application system. These fees could change in future years as program costs are reevaluated. Read the full story...
The following summaries and links are from E-News for Tax Professionals (Issues 2010-26 and 2010-27). To subscribe to this or other IRS email updates, CLICK HERE.
IRS Provides Tax Help, Guidance to Gulf Oil Spill Victims
The Internal Revenue Service is providing guidance to individuals and businesses affected by the oil spill in the Gulf of Mexico and has announced a number of new efforts to help affected taxpayers, including a special Gulf Coast Assistance Day to be held at four locations on July 17.
Deadlines Extended for Certain Retirement Plans in Eight States
The Internal Revenue Service is providing administrative relief for sponsors of defined contribution plans, such as section 401(k) plans, that were affected by the storms and other severe weather in those counties in Alabama, Connecticut, Massachusetts, Mississippi, New Jersey, Rhode Island, Tennessee and West Virginia declared Presidential Disaster Areas during the period from March 1 through May 31, 2010.
Affordable Care Act Provides Expanded Tax Benefit to Health Professionals Working in Underserved Areas
The IRS has issued a news release describing how the Affordable Care Act included a change in the law, effective in 2009, that expands a tax exclusion for amounts received by health professionals under loan repayment and forgiveness programs.
Qualifying Therapeutic Discovery Project Program
Small firms may now begin applying for certification for tax credits or grants available for projects that show significant potential to produce new cost-saving therapies, create U.S. jobs, and increase U.S. competitiveness.
Use Form 8942, Application for Certification of Qualified Investments Eligible for Credits and Grants Under the Qualifying Therapeutic Discovery Project Program. Applications must be postmarked no later than July 21, 2010. See news release IR-2010-76 for more information.
Technical Guidance
Notice 2010-45 provides the procedures under which an eligible taxpayer may apply for tax credits or grants under the Qualifying Therapeutic Discovery Project Program.
Revenue Ruling 2010-18 provides
various prescribed rates for federal income tax purposes including the applicable
federal interest rates, the adjusted applicable federal interest rates, the
adjusted federal long-term rate, the adjusted federal long-term tax-exempt
rate. These rates are determined as prescribed by § 1274.
Revenue Procedure
2010-25 provides issuers of qualified mortgage bonds with (1) average area
purchase price safe harbors for residences located in statistical areas in
each state, the District of Columbia, Puerto Rico, the Northern Mariana Islands,
American Samoa, the Virgin Islands, and Guam, and (2) the nationwide average
purchase price for residences located in the United States.
TD 9487 contains final regulations that apply to loss corporations that have undergone an ownership change within the meaning of section 382. These regulations provide guidance regarding the treatment of prepaid income under the built-in gain provisions of section 382(h).
TD 9488 contains final regulations under section 6404(g)(2)(E) of the Internal Revenue Code on the suspension of any interest, penalty, addition to tax, or additional amount with respect to listed transactions or undisclosed reportable transactions. The final regulations reflect changes to the law made by the Internal Revenue Service Restructuring and Reform Act of 1998, the American Jobs Creation Act of 2004, the Gulf Opportunity Zone Act of 2005, the Tax Relief and Health Care Act of 2006, and the Small Business and Work Opportunity Tax Act of 2007. The regulations provide guidance to individual taxpayers who have participated in listed transactions or undisclosed reportable transactions.
